Trump takes aim at prescription drug prices as part of health care reforms

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The Medicare Drug Price Negotiation Program — and prescription medicine prices generally — could change under the administration of President Donald J. Trump.

Meanwhile, patients, physicians and policy makers grapple with the influence of pharmacy benefit managers (PBMs) on prescription drug prices. To fight that, Arkansas has become the first state to bar PBMs from owning pharmacies.

Orders on health care

This week, the president published the executive order, “Lowering Drug Prices by Once Again Putting Americans First.”

President Donald J. Trump
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“My first term included numerous significant actions, including some of the most aggressive in recent history, to deliver lower prescription drug prices to American patients,” Trump’s orders said.

“The message was clear: No longer would the executive branch sit idly by as pharmaceutical manufacturers charged patients in our nation more than those in other countries for the exact same prescription drugs, often made in the exact same places,” he said.

That has been a longtime lament for lawmakers on both sides of the aisle. The president argued his first term included reform efforts ranging from price transparency to caps on insulin copays for Medicare beneficiaries to incentives for innovation.

The administration of President Joe Biden dropped those initiatives but included Medicare drug price negotiations in the Inflation Reduction Act. “While this program has the commendable goal of reducing the drug prices Medicare and its beneficiaries pay, its administratively complex and expensive regime has thus far produced much lower savings than projected,” Trump’s executive order said.

Robert F. Kennedy Jr.
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To change that, the president ordered U.S. Department of Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. has 60 days to seek guidance on Medicare drug price talks for 2028, then report back. Goals include improving transparency and minimizing negative effects on pharmaceutical innovation within the country. The revisions must lead to a bargain “to eclipse the 22% in savings achieved in the program’s first year,” said an accompanying fact sheet published by the White House.

The order includes 14 points to examine regarding drug pricing and policy, with deadlines ranging from 90 days to a year. For example:

• Within a year, there will be a rulemaking plan to obtain better value for high-cost prescription drugs and biological products covered by Medicare.
• Within six months, there will be a survey to seek hospital costs for covered drugs at hospital outpatient departments.
• Within six months, Kennedy and the president’s economic advisers will make recommendations on ensuring drug makers pay accurate Medicaid rebates.

There are plans to make insulin and epinephrine available at lower prices; improve competition for generics and biosimilars, and reclassify prescription drugs for over-the-counter sale; increase drug imports to lower prices; make medicines more affordable for seniors, according to the order.

There are additional targets: anticompetitive behavior by drug makers, and PBMs. The order demands recommendations “on how best to promote a more competitive, efficient, transparent, and resilient pharmaceutical value chain that delivers lower drug prices for Americans,” due within 90 days.

“The American people deserve better,” the president’s executive order said. “It is time to restore the progress our Nation made in my first term to deliver lower prescription drug prices by putting Americans first and making America healthy again.”

‘Lasting reform that puts patients first’

The president’s order drew praise and criticism.

Rep. Greg Murphy, MD (R-North Carolina), a surgeon, specifically supported Trump’s order for addressing the “pill penalty.” The IRA included it as a form of price control that affects small molecule prescription drugs four years earlier than large molecule biological products.

"Despite being the center of innovation and having immense resources, America spends nearly twice as much on health care compared to other developed nations," Murphy said in a statement. "I applaud President Trump for taking meaningful steps to reverse the IRA’s innovation-killing pill penalty similar to the EPIC Act in Congress, ensure care isn’t pushed out of less costly doctors’ offices, and bring transparency to Americans' prescription drug benefits.

“I look forward to working closely with the administration to deliver on the directives made in the president’s executive order and enact lasting reform that puts patients first," Murphy said.

‘All bark, no bite’

Sen. Ron Wyden (D-Oregon), ranking member of the Senate Finance Committee, panned the order, saying it will lead to a $10 billion handout to Big Pharma.

“Just like his first term, Trump is all bark and no bite when it comes to lowering the cost of prescription drugs,” Wyden said in a statement. “This executive order is rife with goodies that Big Pharma has been begging for, primarily by weakening Medicare negotiation, which is going to mean higher prices for American seniors and families while the drug companies get a windfall to the tune of $10 billion.

“Democrats created Medicare’s drug negotiation authority without a single Republican vote — now is the time for Trump to faithfully follow the law Congress passed without watering it down at Big Pharma’s request,” Wyden said.

‘Innovate new market-based approaches’

The Pharmaceutical Care Management Association (PCMA), a trade group for pharmacy benefit managers, said they have a common goal with the Trump administration.

“PBMs responded to President Trump’s call to make insulin more affordable by offering innovative solutions in the market, leveraging competition as it became available, and adding to the public pressure on Big Pharma to lower the prices they set on the drugs they market,” said a statement from PCMA. “We are ready to work with the White House, plan sponsors, and other stakeholders on solutions that will effectively lower prices and improve outcomes for patients — while protecting the Part D program and beneficiaries from premium hikes and lost access to pharmacy options.

“We will also continue to innovate new market-based approaches to deliver lower out-of-pocket costs, inject more transparency into the system, and support our partners in the pharmacy community.”

PBMs need reining in, pharmacists say

The president’s order found support from the National Community PharmacistsAssociation (NCPA), which blasted PBMs for their alleged conduct that keeps drug prices high while reducing fair market competition.

“President Trump has talked several times about the need to rein them in, and we’re pleased he’s looking to do so,” NCPA said in a statement this week. “Independent community pharmacies are competing against a deck that is stacked against them by PBMs who want to stomp out their competition through anticompetitive tactics like paying the pharmacy below its cost to buy drugs and overzealous audits.

“Ultimately these henchmen for Big Insurance increase prescription costs and reduce access for consumers,” the NCPA statement said. “For these pharmacies and the millions of patients who rely on them, the quicker PBMs can be brought to heel, the better, whether through executive orders, regulation, PBM reform legislation, or a combination of actions.”

Change starting in Arkansas

The president’s order was not the only announcement this week regarding players in the prescription drug market.

On April 16, Arkansas Gov. Sarah Huckabee Sanders signed legislation that bans PBMs from owning pharmacies, which could lead to anticompetitive business practices. Her news release noted the three largest PBMs process 80% of the nation’s prescriptions and account for 70% of all specialty drug revenue.

“For far too long, drug middlemen called PBMs have taken advantage of lax regulations to abuse customers, inflate drug prices, and cut off access to critical medications. Not anymore,” Sanders said in the news release. “These massive corporations are attacking our state because we will be the first in the country to hold them accountable for their anticompetitive actions, but Arkansas has never been afraid to be a conservative leader for America.”

Groundbreaking, structural change

NCPA called the legislation groundbreaking, and inspiring similar bills in Indiana, New York, Texas and Vermont. This week, at least 39 state and territory attorneys general sent a joint letter to congressional leaders asking for the same rule at the national level.

The pharmacists of Arkansas are grateful, said John Vinson, CEO of the Arkansas Pharmacists Association.

He said the legislation marked a new day in that state “as the fox will no longer guard the henhouse.” NCPS Senior Vice President of Government Affairs Anne Cassity said the legislation “is a structural change that gets to the heart of the problem — the conflicts of interest inherent in vertical integration that PBMs have been manipulating to the detriment of patients, taxpayers, and pharmacies.”